Intrinsic value of Bonanza Creek Energy - BCEI

Previous Close

$25.94

  Intrinsic Value

$0.10

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-15%

Previous close

$25.94

 
Intrinsic value

$0.10

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-15%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BCEI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -33.45
  20.50
  18.95
  17.56
  16.30
  15.17
  14.15
  13.24
  12.41
  11.67
  11.01
  10.40
  9.86
  9.38
  8.94
  8.55
  8.19
  7.87
  7.58
  7.33
  7.09
  6.88
  6.70
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
Revenue, $m
  195
  235
  280
  329
  382
  440
  502
  569
  639
  714
  793
  875
  962
  1,052
  1,146
  1,244
  1,346
  1,451
  1,562
  1,676
  1,795
  1,918
  2,047
  2,180
  2,319
  2,464
  2,615
  2,772
  2,935
  3,106
  3,284
Variable operating expenses, $m
 
  963
  1,145
  1,346
  1,566
  1,803
  2,058
  2,331
  2,620
  2,926
  3,248
  3,586
  3,939
  4,309
  4,694
  5,095
  5,513
  5,947
  6,398
  6,866
  7,353
  7,860
  8,386
  8,933
  9,503
  10,095
  10,712
  11,355
  12,025
  12,724
  13,453
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  318
  963
  1,145
  1,346
  1,566
  1,803
  2,058
  2,331
  2,620
  2,926
  3,248
  3,586
  3,939
  4,309
  4,694
  5,095
  5,513
  5,947
  6,398
  6,866
  7,353
  7,860
  8,386
  8,933
  9,503
  10,095
  10,712
  11,355
  12,025
  12,724
  13,453
Operating income, $m
  -123
  -728
  -866
  -1,018
  -1,183
  -1,363
  -1,556
  -1,762
  -1,981
  -2,212
  -2,455
  -2,711
  -2,978
  -3,257
  -3,548
  -3,852
  -4,167
  -4,495
  -4,836
  -5,190
  -5,559
  -5,941
  -6,339
  -6,753
  -7,183
  -7,631
  -8,098
  -8,584
  -9,090
  -9,618
  -10,170
EBITDA, $m
  -12
  -632
  -752
  -883
  -1,027
  -1,183
  -1,351
  -1,530
  -1,719
  -1,920
  -2,131
  -2,353
  -2,585
  -2,828
  -3,081
  -3,344
  -3,618
  -3,903
  -4,199
  -4,506
  -4,826
  -5,158
  -5,504
  -5,863
  -6,236
  -6,625
  -7,030
  -7,452
  -7,892
  -8,351
  -8,829
Interest expense (income), $m
  59
  63
  70
  85
  102
  120
  139
  160
  182
  206
  231
  257
  285
  314
  344
  375
  408
  442
  478
  515
  553
  593
  634
  677
  722
  768
  817
  867
  920
  975
  1,032
Earnings before tax, $m
  -199
  -791
  -936
  -1,103
  -1,285
  -1,483
  -1,695
  -1,922
  -2,163
  -2,418
  -2,686
  -2,968
  -3,263
  -3,571
  -3,892
  -4,227
  -4,575
  -4,937
  -5,314
  -5,705
  -6,111
  -6,534
  -6,973
  -7,430
  -7,905
  -8,400
  -8,914
  -9,451
  -10,010
  -10,593
  -11,201
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -199
  -791
  -936
  -1,103
  -1,285
  -1,483
  -1,695
  -1,922
  -2,163
  -2,418
  -2,686
  -2,968
  -3,263
  -3,571
  -3,892
  -4,227
  -4,575
  -4,937
  -5,314
  -5,705
  -6,111
  -6,534
  -6,973
  -7,430
  -7,905
  -8,400
  -8,914
  -9,451
  -10,010
  -10,593
  -11,201

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  81
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,134
  1,366
  1,625
  1,910
  2,222
  2,559
  2,921
  3,307
  3,718
  4,152
  4,609
  5,088
  5,590
  6,115
  6,661
  7,230
  7,823
  8,439
  9,079
  9,744
  10,435
  11,153
  11,900
  12,677
  13,485
  14,326
  15,202
  16,114
  17,065
  18,056
  19,091
Adjusted assets (=assets-cash), $m
  1,053
  1,366
  1,625
  1,910
  2,222
  2,559
  2,921
  3,307
  3,718
  4,152
  4,609
  5,088
  5,590
  6,115
  6,661
  7,230
  7,823
  8,439
  9,079
  9,744
  10,435
  11,153
  11,900
  12,677
  13,485
  14,326
  15,202
  16,114
  17,065
  18,056
  19,091
Revenue / Adjusted assets
  0.185
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
Average production assets, $m
  796
  959
  1,141
  1,341
  1,560
  1,796
  2,051
  2,322
  2,610
  2,915
  3,236
  3,573
  3,925
  4,293
  4,677
  5,077
  5,492
  5,925
  6,374
  6,841
  7,326
  7,831
  8,355
  8,900
  9,468
  10,058
  10,673
  11,314
  11,981
  12,678
  13,404
Working capital, $m
  -958
  -23
  -28
  -33
  -38
  -44
  -50
  -57
  -64
  -71
  -79
  -88
  -96
  -105
  -115
  -124
  -135
  -145
  -156
  -168
  -179
  -192
  -205
  -218
  -232
  -246
  -261
  -277
  -294
  -311
  -328
Total debt, $m
  985
  1,100
  1,333
  1,589
  1,869
  2,173
  2,499
  2,847
  3,216
  3,607
  4,018
  4,450
  4,901
  5,373
  5,865
  6,377
  6,910
  7,465
  8,041
  8,639
  9,262
  9,908
  10,580
  11,279
  12,006
  12,763
  13,551
  14,372
  15,228
  16,121
  17,052
Total liabilities, $m
  1,115
  1,230
  1,463
  1,719
  1,999
  2,303
  2,629
  2,977
  3,346
  3,737
  4,148
  4,580
  5,031
  5,503
  5,995
  6,507
  7,040
  7,595
  8,171
  8,769
  9,392
  10,038
  10,710
  11,409
  12,136
  12,893
  13,681
  14,502
  15,358
  16,251
  17,182
Total equity, $m
  19
  137
  163
  191
  222
  256
  292
  331
  372
  415
  461
  509
  559
  611
  666
  723
  782
  844
  908
  974
  1,044
  1,115
  1,190
  1,268
  1,348
  1,433
  1,520
  1,611
  1,706
  1,806
  1,909
Total liabilities and equity, $m
  1,134
  1,367
  1,626
  1,910
  2,221
  2,559
  2,921
  3,308
  3,718
  4,152
  4,609
  5,089
  5,590
  6,114
  6,661
  7,230
  7,822
  8,439
  9,079
  9,743
  10,436
  11,153
  11,900
  12,677
  13,484
  14,326
  15,201
  16,113
  17,064
  18,057
  19,091
Debt-to-equity ratio
  51.842
  8.050
  8.200
  8.320
  8.410
  8.490
  8.550
  8.610
  8.650
  8.690
  8.720
  8.740
  8.770
  8.790
  8.800
  8.820
  8.830
  8.850
  8.860
  8.870
  8.880
  8.880
  8.890
  8.900
  8.900
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
Adjusted equity ratio
  -0.059
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -199
  -791
  -936
  -1,103
  -1,285
  -1,483
  -1,695
  -1,922
  -2,163
  -2,418
  -2,686
  -2,968
  -3,263
  -3,571
  -3,892
  -4,227
  -4,575
  -4,937
  -5,314
  -5,705
  -6,111
  -6,534
  -6,973
  -7,430
  -7,905
  -8,400
  -8,914
  -9,451
  -10,010
  -10,593
  -11,201
Depreciation, amort., depletion, $m
  111
  96
  114
  134
  156
  180
  205
  232
  261
  292
  324
  357
  393
  429
  468
  508
  549
  592
  637
  684
  733
  783
  836
  890
  947
  1,006
  1,067
  1,131
  1,198
  1,268
  1,340
Funds from operations, $m
  59
  -695
  -822
  -969
  -1,129
  -1,303
  -1,490
  -1,690
  -1,902
  -2,126
  -2,362
  -2,610
  -2,870
  -3,142
  -3,425
  -3,719
  -4,026
  -4,345
  -4,676
  -5,021
  -5,379
  -5,751
  -6,138
  -6,540
  -6,958
  -7,394
  -7,847
  -8,320
  -8,812
  -9,325
  -9,861
Change in working capital, $m
  44
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
Cash from operations, $m
  15
  -691
  -817
  -964
  -1,124
  -1,297
  -1,484
  -1,683
  -1,895
  -2,119
  -2,354
  -2,602
  -2,862
  -3,133
  -3,415
  -3,709
  -4,016
  -4,334
  -4,665
  -5,009
  -5,367
  -5,739
  -6,125
  -6,526
  -6,944
  -7,379
  -7,832
  -8,304
  -8,795
  -9,308
  -9,843
Maintenance CAPEX, $m
  0
  -80
  -96
  -114
  -134
  -156
  -180
  -205
  -232
  -261
  -292
  -324
  -357
  -393
  -429
  -468
  -508
  -549
  -592
  -637
  -684
  -733
  -783
  -836
  -890
  -947
  -1,006
  -1,067
  -1,131
  -1,198
  -1,268
New CAPEX, $m
  -53
  -163
  -182
  -200
  -219
  -237
  -254
  -271
  -288
  -305
  -321
  -337
  -352
  -368
  -384
  -400
  -416
  -432
  -449
  -467
  -485
  -504
  -524
  -545
  -567
  -590
  -615
  -641
  -668
  -696
  -726
Cash from investing activities, $m
  -67
  -243
  -278
  -314
  -353
  -393
  -434
  -476
  -520
  -566
  -613
  -661
  -709
  -761
  -813
  -868
  -924
  -981
  -1,041
  -1,104
  -1,169
  -1,237
  -1,307
  -1,381
  -1,457
  -1,537
  -1,621
  -1,708
  -1,799
  -1,894
  -1,994
Free cash flow, $m
  -52
  -934
  -1,095
  -1,278
  -1,477
  -1,690
  -1,918
  -2,159
  -2,415
  -2,684
  -2,967
  -3,262
  -3,571
  -3,893
  -4,228
  -4,577
  -4,939
  -5,316
  -5,707
  -6,114
  -6,536
  -6,976
  -7,432
  -7,907
  -8,402
  -8,916
  -9,453
  -10,012
  -10,595
  -11,203
  -11,837
Issuance/(repayment) of debt, $m
  113
  115
  233
  257
  280
  303
  326
  348
  370
  391
  411
  432
  452
  472
  492
  512
  533
  554
  576
  599
  622
  647
  672
  699
  727
  757
  788
  821
  856
  893
  931
Issuance/(repurchase) of shares, $m
  0
  908
  962
  1,131
  1,316
  1,516
  1,731
  1,960
  2,204
  2,461
  2,732
  3,016
  3,313
  3,623
  3,947
  4,284
  4,634
  4,999
  5,378
  5,771
  6,181
  6,606
  7,048
  7,508
  7,986
  8,484
  9,002
  9,542
  10,105
  10,692
  11,305
Cash from financing (excl. dividends), $m  
  112
  1,023
  1,195
  1,388
  1,596
  1,819
  2,057
  2,308
  2,574
  2,852
  3,143
  3,448
  3,765
  4,095
  4,439
  4,796
  5,167
  5,553
  5,954
  6,370
  6,803
  7,253
  7,720
  8,207
  8,713
  9,241
  9,790
  10,363
  10,961
  11,585
  12,236
Total cash flow (excl. dividends), $m
  59
  89
  100
  110
  120
  130
  140
  149
  158
  167
  176
  185
  193
  202
  211
  219
  228
  237
  247
  256
  266
  277
  288
  299
  311
  324
  337
  352
  366
  382
  399
Retained Cash Flow (-), $m
  190
  -908
  -962
  -1,131
  -1,316
  -1,516
  -1,731
  -1,960
  -2,204
  -2,461
  -2,732
  -3,016
  -3,313
  -3,623
  -3,947
  -4,284
  -4,634
  -4,999
  -5,378
  -5,771
  -6,181
  -6,606
  -7,048
  -7,508
  -7,986
  -8,484
  -9,002
  -9,542
  -10,105
  -10,692
  -11,305
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -819
  -862
  -1,021
  -1,196
  -1,386
  -1,592
  -1,811
  -2,046
  -2,294
  -2,556
  -2,831
  -3,119
  -3,421
  -3,736
  -4,065
  -4,406
  -4,762
  -5,131
  -5,515
  -5,914
  -6,329
  -6,760
  -7,208
  -7,675
  -8,160
  -8,665
  -9,191
  -9,739
  -10,310
  -10,906
Discount rate, %
 
  14.70
  15.44
  16.21
  17.02
  17.87
  18.76
  19.70
  20.68
  21.72
  22.80
  23.94
  25.14
  26.40
  27.72
  29.10
  30.56
  32.09
  33.69
  35.38
  37.15
  39.00
  40.95
  43.00
  45.15
  47.41
  49.78
  52.27
  54.88
  57.63
  60.51
PV of cash for distribution, $m
 
  -714
  -647
  -651
  -638
  -609
  -567
  -514
  -455
  -391
  -328
  -267
  -211
  -163
  -122
  -88
  -62
  -42
  -28
  -17
  -11
  -6
  -4
  -2
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  17.3
  10.2
  6.0
  3.5
  2.1
  1.3
  0.8
  0.5
  0.3
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Bonanza Creek Energy Inc., an independent energy company, engages in the acquisition, exploration, development, and production of onshore oil and associated liquids-rich natural gas in the United States. The company’s oil and liquids weighted assets are located primarily in the Wattenberg Field in Colorado; and the Dorcheat Macedonia Field in southern Arkansas. It also owns and operates oil-producing assets in the North Park Basin in Colorado; and the McKamie Patton Field in Southern Arkansas. Bonanza Creek Energy Inc. was founded in 2010 and is headquartered in Denver, Colorado. On January 4, 2017, Bonanza Creek Energy Inc. along with its affiliates filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

FINANCIAL RATIOS  of  Bonanza Creek Energy (BCEI)

Valuation Ratios
P/E Ratio -0.1
Price to Sales 0.1
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 0.8
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate -33.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -88.1%
Cap. Spend. - 3 Yr. Gr. Rate -34.6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 5184.2%
Interest Coverage -2
Management Effectiveness
Return On Assets -11.7%
Ret/ On Assets - 3 Yr. Avg. -17.4%
Return On Total Capital -19.1%
Ret/ On T. Cap. - 3 Yr. Avg. -24.6%
Return On Equity -174.6%
Return On Equity - 3 Yr. Avg. -109.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 71.3%
Gross Margin - 3 Yr. Avg. 77.3%
EBITDA Margin -14.9%
EBITDA Margin - 3 Yr. Avg. -56.9%
Operating Margin -63.1%
Oper. Margin - 3 Yr. Avg. -127%
Pre-Tax Margin -102.1%
Pre-Tax Margin - 3 Yr. Avg. -135.9%
Net Profit Margin -102.1%
Net Profit Margin - 3 Yr. Avg. -117.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 19.1%
Payout Ratio 0%

BCEI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BCEI stock intrinsic value calculation we used $195 million for the last fiscal year's total revenue generated by Bonanza Creek Energy. The default revenue input number comes from 2016 income statement of Bonanza Creek Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BCEI stock valuation model: a) initial revenue growth rate of 20.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.7%, whose default value for BCEI is calculated based on our internal credit rating of Bonanza Creek Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Bonanza Creek Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BCEI stock the variable cost ratio is equal to 409.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BCEI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.4% for Bonanza Creek Energy.

Corporate tax rate of 27% is the nominal tax rate for Bonanza Creek Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BCEI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BCEI are equal to 408.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Bonanza Creek Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BCEI is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $19 million for Bonanza Creek Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 48.267 million for Bonanza Creek Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Bonanza Creek Energy at the current share price and the inputted number of shares is $1.3 billion.

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COMPANY NEWS

▶ What to Expect from US Gasoline Demand   [Aug-16-17 11:36AM  Market Realist]
▶ Bonanza Creek posts 2Q profit   [Aug-10-17 01:07AM  Associated Press]
▶ Russias Crude Oil Production Was Flat Again   [09:11AM  Market Realist]
▶ Cushing Crude Oil Inventories Fell for 10th Consecutive Week   [Aug-01-17 12:06PM  Market Realist]
▶ Global Crude Oil Supply Outages Near 5-Year Low   [Jul-26-17 10:06AM  Market Realist]
▶ Will US Crude Oil Prices Be Range-Bound this Week?   [Jul-24-17 01:10PM  Market Realist]
▶ US Crude Oil Production Could Hit a Record   [Jul-20-17 11:35AM  Market Realist]
▶ Will the APIs Crude Oil Inventories Help Crude Oil Prices?   [Jul-11-17 10:06AM  Market Realist]
▶ Will the US Dollar Continue Its Bearish Momentum This Week?   [Jul-04-17 06:05PM  Market Realist]
▶ Crude Oil Futures Rose for the Seventh Straight Day   [Jul-03-17 11:02AM  Market Realist]
▶ Cushing Inventories Fell for the Ninth Time in 10 Weeks   [Jun-26-17 11:54AM  Market Realist]
▶ Will Chinas Crude Oil Imports Help Crude Oil Bulls?   [Jun-21-17 11:35AM  Market Realist]
▶ [$$] Investors in Restructured Energy Companies Chalk Up Big Losses   [Jun-09-17 05:17PM  The Wall Street Journal]
▶ Chinas Teapot Refineries Impact the Crude Oil Market   [Jun-07-17 10:56AM  Market Realist]
▶ U.S. Rig Count Increases 20 Consecutive Weeks   [Jun-06-17 03:18PM  Zacks]
▶ US Rig Count Increases for 19 Consecutive Weeks   [May-30-17 10:01AM  Zacks]
▶ US Gasoline Inventories Are above Their 5-Year Range   [May-18-17 11:35AM  Market Realist]
▶ Analyzing Chinas Crude Oil Imports and Demand   [May-17-17 07:40AM  Market Realist]
▶ Oil and Gas Stock Roundup: Crude Oil Mounts a Comeback   [May-13-17 10:00AM  Motley Fool]
▶ US Gasoline Inventories: Blessing in Disguise   [May-11-17 10:03AM  Market Realist]
▶ Bonanza Creek reports 1Q loss   [May-10-17 04:16PM  Associated Press]
▶ Why US Gasoline Inventories Rose for the Third Straight Week   [May-04-17 12:06PM  Market Realist]
▶ US Gasoline Inventories Rose for the Second Time in 10 Weeks   [Apr-27-17 08:58AM  Market Realist]
▶ US Gasoline Inventories Rose for the First Time in 9 Weeks   [Apr-20-17 09:53AM  Market Realist]
▶ Chinas Crude Oil Imports Hit a New Record   [Apr-19-17 07:37AM  Market Realist]
▶ US Gasoline Inventories Fell for 8th Straight Week   [Apr-13-17 08:55AM  Market Realist]
▶ US Gasoline Demand Might Support Crude Oil Bears   [Apr-12-17 07:42AM  Market Realist]
▶ Denver energy company says court approves of its bankruptcy plan   [Apr-10-17 02:20PM  American City Business Journals]
▶ [$$] Bonanza Creek Cleared to Exit Chapter 11 Bankruptcy   [Apr-07-17 12:41PM  The Wall Street Journal]
▶ US Gasoline Demand Is Important for Crude Oil Bulls   [Mar-29-17 07:38AM  Market Realist]
▶ [$$] Bonanza Creek Bankruptcy Plan Hearing Delayed to April   [Mar-10-17 12:15PM  at The Wall Street Journal]
▶ [$$] Bonanza Creek Shareholders Unveil Rival Restructuring Strategy   [Mar-09-17 12:23PM  at The Wall Street Journal]
▶ [$$] Bonanza Creek and Creditors Fight Call for New Leadership   [Mar-08-17 03:09PM  at The Wall Street Journal]
▶ [$$] Bonanza Creek Energy Shareholders Weighing Rival Debt-Repayment Plan   [Feb-15-17 05:08PM  at The Wall Street Journal]
▶ [$$] Bonanza Creek Shareholders Seek Trustee, New Plan   [Feb-06-17 03:48PM  at The Wall Street Journal]
▶ [$$] Avaya Keeps High Yield Default Rate at 4.6%   [Jan-30-17 02:00PM  at The Wall Street Journal]
▶ [$$] Deal Overtures Roil Bonanza Creek Bankruptcy   [Jan-18-17 01:54PM  at The Wall Street Journal]
▶ Colorado energy company files prepackaged bankruptcy plan   [Jan-10-17 10:21AM  at bizjournals.com]
▶ [$$] Bonanza Creek Launches Bankruptcy Turnaround Bid   [Jan-05-17 05:58PM  at The Wall Street Journal]
Stock chart of BCEI Financial statements of BCEI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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